A limited constitutional government calls for a rules-based, freemarket monetary system, not the topsy-turvy fiat dollar that now exists under central banking. This issue of the Cato Journal examines the case for alternatives to central banking and the reforms needed to move toward free-market money.

The more widespread use of body cameras will make it easier for the American public to better understand how police officers do their jobs and under what circumstances they feel that it is necessary to resort to deadly force.

Americans are finally enjoying an improving economy after years of recession and slow growth. The unemployment rate is dropping, the economy is expanding, and public confidence is rising. Surely our economic crisis is behind us. Or is it? In Going for Broke: Deficits, Debt, and the Entitlement Crisis, Cato scholar Michael D. Tanner examines the growing national debt and its dire implications for our future and explains why a looming financial meltdown may be far worse than anyone expects.

The Cato Institute has released its 2014 Annual Report, which documents a dynamic year of growth and productivity. “Libertarianism is not just a framework for utopia,” Cato’s David Boaz writes in his book, The Libertarian Mind. “It is the indispensable framework for the future.” And as the new report demonstrates, the Cato Institute, thanks largely to the generosity of our Sponsors, is leading the charge to apply this framework across the policy spectrum.

Search form

Nick Gillespie and Matt Welch of Reason have a great cover story in Politics, the new and livelier update of Campaigns and Elections magazine. Titled “Tuned Out,” the article says that “politics is a lagging indicator of American society,” so this year’s presidential candidates are “channeling shopworn agendas and tired identities to a body politic desperate for a new political era.”

They predict that today’s individualist, consumer-driven culture will eventually produce a politics to match. “Much of this new activity will be explicitly libertarian, since the decentralization of control and individual empowerment is so deeply embedded in Internet technology and culture…. The Long Tail future of politics just as surely belongs to the president and party that figures out the secret to success is giving away power by letting the voter decide more of what matters.”

We can only hope. The cover illustration for the article, showing a Fountainhead-reading, South Park-watching young voter impervious to the appeals of the two old parties, reminded me of this recent “Zippy the Pinhead” cartoon, which also contrasted two big-government parties with leave-me-alone independents (click for larger version):

Speaking to reporters in Amman, the Jordanian capital, McCain said he and two Senate colleagues traveling with him continue to be concerned about Iranian operatives “taking al-Qaeda into Iran, training them and sending them back.”

Pressed to elaborate, McCain said it was “common knowledge and has been reported in the media that al-Qaeda is going back into Iran and receiving training and are coming back into Iraq from Iran, that’s well known. And it’s unfortunate.” A few moments later, Sen. Joseph Lieberman, standing just behind McCain, stepped forward and whispered in the presidential candidate’s ear. McCain then said: “I’m sorry, the Iranians are training extremists, not al-Qaeda.”

Here’s a great video of our friend, Rep. Jeff Flake (R, AZ), speaking about the decades-long embargo on Cuba and restrictions on the freedom of Americans to travel there. Congressman Flake spoke at a Cato event (scroll to about half way down the page) on Capitol Hill last year along with Congressman Charlie Rangel (D, NY). Cato’s Center for Trade Policy Studies has longargued for an end to the failed embargo on Cuba.

The U.S. Department of Commerce yesterday released the 2007 trade deficit figure: $738.6 billion or 5.3 percent of GDP. It will no doubt come as a relief to the current account deficit (CAD) hawks to know that the CAD is down 9 percent on 2006, primarily due to higher export earnings (thanks, cheaper dollar) and an economic slowdown. More on the link between economic growth and the deficit here.

[T]he only way to eliminate disparities in health outcomes is to equalize services outside the health care area. Health depends on the education we have, the food we eat, the cars we drive, and the friends we make. Equalization in all these areas sends us once again down an egalitarian sinkhole…

The great failing of [the mandate-and-subsidize] approach is that it takes as given the huge regulatory apparatus that now places a hammerlock on the sensible provision of health care. Better it be started at the other side of the problem, by asking which of our myriad forms of regulation are justified on efficiency grounds. Our state-based medical licensing system imposes sharp restriction on the free flow of labor across state lines. The Health Insurance Portability and Accountability Act (HIPAA) imposes numerous restrictions on the use and transfer of information that drive up the cost of medical care in the name of the protection of patient privacy. A costly and unreliable medical malpractice system leads to the closure of desperately needed facilities that serve marginal communities. Medicare offers huge subsidies for affluent seniors on the backs of people with a fraction of those affluent seniors’ come. Most importantly, perhaps, constant barriers are thrown in the path of nonmedical firms entering the market to supply health care. Why not let people pay for their own health care at a Walgreens clinic instead of waiting in an emergency room, which is the worst place to provide medical care for indigent patients?

The first order of business in my view is to resist any plea for a direct attack on disparities in health care. Put any consideration of new schemes of redistribution last. Put first a relentless reexamination of every single regulatory structure now in place, in the hope that it could be either shrunk or dismantled.

This morning the Supreme Court will be hearing oral arguments in the landmark Second Amendment case, DC v. Heller. People started getting in line last night. (HT: Volokh Conspiracy). Here’s the story from today’s Washington Post. An audio of the argument will be released around 11:30 am EST for those of us who could not attend the live event. The attorneys who present the arguments must be prepared for three scenarios. Scenario I is a “cold bench” – which means few questions. In that scenario, the attorney must be ready to speak persuasively for about 30 minutes. Scenario II is the “hot bench” – which means lots of questions. In that scenario, the attorney must be ready for a barrage of questions and just hope that he/she can make a strong opening and closing without interruption. Scenario III is somewhere in between the two extremes. Everyone expects a hot bench today. Should be very interesting.

This week, the journal Forum for Health Economics & Policy publishes a paper of mine on “large” health savings accounts, a novel proposal to reduce government control over the U.S. health care sector.

Government exempts employer-sponsored insurance (ESI) from income and payroll taxes, which seems like a tax cut. But it operates more like a tax increase because it strips workers of control over their earnings. Oh, and it drives up health insurance premiums too.

Large HSAs would replace the tax exclusion for ESI with an exclusion for money contributed to a Large HSA, which the worker would own. The same tax exclusion would be available to all workers, regardless of where or whether they purchase health insurance.

Altering the tax exclusion that way would force employers to shift the money they now use to purchase health benefits – on average almost $4,000 for individuals and $9,000 for families – into workers’ cash wages. Individuals could then contribute, say, up to $8,000 annually to a Large HSA. Families could contribute up to $16,000.

Workers could use those funds to purchase medical care and health insurance, from any source, tax-free. For example, they could hand the money right back to their employer and stay on the company plan. Anything the worker doesn’t spend grows tax-free.

Large HSAs have a number of advantages over other tax-based health care reform proposals, including Sen. John McCain’s proposal to provide tax credits for health insurance. Large HSAs would eliminate the tax code’s influence over consumers’ health care decisions to a greater extent, and with fewer economic and political downsides, than Sen. McCain’s tax-credit.

One downside of McCain’s tax credit proposal, as well as other reform proposals, is that they discriminate against the uninsurable. A tax break for health insurance is only valuable if you can obtain health insurance. Tying a tax break to insurance automatically excludes a lot of very sick people. In contrast, Large HSAs offer the same tax break to the uninsurable, who arguably need it most.

The Washington Post refers to Ralph Nader’s Public Citizen as “a public-interest group” in an article on costly federal regulations that the group is defending. So I wondered: Does the Post think federal regulation is always in the public interest? Or that groups that defend regulation are really acting “in the public interest”? What about groups that work to reduce the burden of government on consumers or taxpayers? Are they “public interest groups”? Certainly, as a member of the public, I don’t really see bigger, costlier government and more expensive products as being in my interest.

So I went to Nexis to investigate. Sure enough, in the past year the Post has used the phrase “public interest group[s]” 41 times. In every case (except one Associated Press story), the groups were on the political left. They demanded more spending or regulation by the federal government, actions that some but not all people would say are in the public interest.

I don’t always disagree with these “public interest groups.” For instance, one story quoted the Media Access Project. They almost always support more regulation of media companies, except when the question is regulation of obscenity or profanity. In this story MAP, “a public interest group,” applauded a court ruling striking down an FCC ruling that the use of profanity on a Fox News broadcast was indecent. Hear, hear. Now if only MAP would defend the rights of media companies to make their own decisions on non-obscene broadcasting.

But how about the National Taxpayers Union, which works to eliminate wasteful spending and reduce the burden of government? Was it a public interest group? Not in the Post. How about the Competitive Enterprise Institute, which works for competition and more choice for consumers? Not a public interest group.

The Post seems to have a very consistent but arguably wrong-headed view about just what is in the public’s interest.